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SEC Filing Details

10-K
NRG ENERGY, INC. filed this Form 10-K on 03/01/2018
Entire Document
 

For the year ended December 31, 2015, the $9 million loss from economic hedge positions was primarily the result of a decrease in the value of forward purchases of natural gas due to a decrease in natural gas prices.
Credit Risk Related Contingent Features
Certain of the Company's hedging agreements contain provisions that require the Company to post additional collateral if the counterparty determines that there has been deterioration in credit quality, generally termed "adequate assurance" under the agreements, or require the Company to post additional collateral if there were a one notch downgrade in the Company's credit rating. The collateral required for contracts that have adequate assurance clauses that are in net liability positions as of December 31, 2017 was $25 million. The collateral required for contracts with credit rating contingent features that are in a net liability position as of December 31, 2017 was $7 million. The Company is also a party to certain marginable agreements under which it has a net liability position, but the counterparty has not called for the collateral due, which was approximately $4 million as of December 31, 2017.
See Note 4, Fair Value of Financial Instruments, for discussion regarding concentration of credit risk.
Note 6 — Nuclear Decommissioning Trust Fund
NRG's Nuclear Decommissioning Trust Fund assets, which are for the decommissioning of STP, are comprised of securities classified as available-for-sale and recorded at fair value based on actively quoted market prices. Although NRG is responsible for managing the decommissioning of its 44% interest in STP, the predecessor utilities that owned STP are authorized by the PUCT to collect decommissioning funds from their ratepayers to cover decommissioning costs on behalf of NRG. NRC requirements determine the decommissioning cost estimate which is the minimum required level of funding. In the event that funds from the ratepayers that accumulate in the nuclear decommissioning trust are ultimately determined to be inadequate to decommission the STP facilities, the utilities will be required to collect through rates charged to rate payers all additional amounts, with no obligation from NRG, provided that NRG has complied with PUCT rules and regulations regarding decommissioning trusts. Following completion of the decommissioning, if surplus funds remain in the decommissioning trusts, any excess will be refunded to the respective ratepayers of the utilities.
NRG accounts for the Nuclear Decommissioning Trust Fund in accordance with ASC 980, Regulated Operations, or ASC 980, because the Company's nuclear decommissioning activities are subject to approval by the PUCT, with regulated rates that are designed to recover all decommissioning costs and that can be charged to and collected from the ratepayers per PUCT mandate. Since the Company is in compliance with PUCT rules and regulations regarding decommissioning trusts and the cost of decommissioning is the responsibility of the Texas ratepayers, not NRG, all realized and unrealized gains or losses (including other-than-temporary impairments) related to the Nuclear Decommissioning Trust Fund are recorded to the Nuclear Decommissioning Trust liability and are not included in net income or accumulated other comprehensive income, consistent with regulatory treatment.
The following table summarizes the aggregate fair values and unrealized gains and losses (including other-than-temporary impairments) for the securities held in the trust funds, as well as information about the contractual maturities of those securities.
 
As of December 31, 2017
 
As of December 31, 2016
(In millions, except otherwise noted)
Fair
Value
 
Unrealized
Gains
 
Unrealized
Losses
 
Weighted-
average
maturities
(in years)
 
Fair
Value
 
Unrealized
Gains
 
Unrealized
Losses
 
Weighted-
average
maturities
(in years)
Cash and cash equivalents
$
47

 
$

 
$

 

 
$
25

 
$

 
$

 

U.S. government and federal agency obligations
43

 
1

 

 
11

 
73

 
1

 

 
11

Federal agency mortgage-backed securities
82

 
1

 
1

 
23

 
62

 
1

 
1

 
25

Commercial mortgage-backed securities
13

 

 

 
20

 
17

 

 
1

 
26

Corporate debt securities
99

 
2

 
1

 
11

 
84

 
1

 
2

 
11

Equity securities
403

 
272

 

 

 
346

 
214

 

 

Foreign government fixed income securities
5

 

 

 
9

 
3

 

 

 
9

Total
$
692

 
$
276

 
$
2

 
 

 
$
610

 
$
217

 
$
4

 
 



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